GrayRobinson, P.A. v. Fireline Restoration, Inc.

Citations: 46 So. 3d 170; 2010 Fla. App. LEXIS 16262; 2010 WL 4226221Docket: Nos. 4D09-2102, 4D09-2116

Court: District Court of Appeal of Florida; October 27, 2010; Florida; State Appellate Court

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The Florida Insurance Guaranty Association (FIGA) appealed a court order permitting Works R Us to garnish funds FIGA paid to GrayRobinson law firm related to an appraisal award for Del Mar Condominiums. Works R Us asserted a claim to these funds as a judgment creditor of Fireline, a contractor involved in repairing Del Mar's hurricane-damaged property. The court reversed the order, determining that neither FIGA nor GrayRobinson owed any debt to Fireline.

The background involved Fireline suing Del Mar for breach of contract after not being paid. Del Mar then filed a third-party complaint against its insurer, Southern Family, which was later declared insolvent, leading to FIGA assuming liability for covered claims. A settlement agreement between Del Mar and Fireline acknowledged Del Mar's entitlement to recover $2.1 million from FIGA, with any excess going to Fireline. Following Fireline's dismissal of its claims against Del Mar and satisfaction of liens, FIGA pursued an appraisal that resulted in an award of $2,882,765.

Subsequently, another contractor, JMC Marketing, sought garnishment alleging Fireline owed them money, and a consent judgment favored JMC for $105,533. FIGA issued a check for $2,727,231 to Del Mar and Fireline, but Del Mar refused it, claiming entitlement to additional funds and lack of agreement with Fireline on their share. FIGA contended its obligation to Del Mar was limited to the appraisal award and owed nothing to Fireline due to the latter's prior dismissal.

The trial court ultimately ruled in favor of FIGA, ordering it to issue two checks totaling $2,727,231 while retaining jurisdiction over the funds and claims. It instructed GrayRobinson to manage the appraisal costs and deposit a portion with the court for potential claimants, including Fireline and Works R Us, allowing them 30 days to file claims. If no claims were made, the funds would be paid to Del Mar, and FIGA would be relieved of further liability once the funds were deposited.

Works R Us obtained a money judgment against Fireline for unpaid work and subsequently issued a writ of garnishment on FIGA and GrayRobinson. After filing a claim related to the Del Mar litigation, FIGA paid Del Mar, and GrayRobinson deposited remaining funds with the clerk. A final judgment favored FIGA, stating Del Mar received no further compensation, leading Works R Us to intervene, asserting that the summary order affected non-parties' rights. The court found no adverse claims to the funds, ordered them to GrayRobinson’s Trust Account, and removed previous claims procedures. Works R Us filed a motion for summary judgment, claiming entitlement to funds held by GrayRobinson, based on FIGA's acknowledgment of Fireline's entitlement to appraisal proceeds. During the hearing, Works R Us admitted other creditors had claims on the funds, and FIGA asserted it owed no money to Fireline. The court ruled in favor of Works R Us, stating FIGA recognized Fireline's rights to proceeds, resulting in a summary judgment requiring GrayRobinson to pay $281,795 to Works R Us. FIGA and GrayRobinson appealed, and the court confirmed the standards for summary judgment and garnishment liabilities. Ultimately, the court determined Works R Us had no greater right to recover funds than Fireline, which had dismissed its claims against Del Mar, leading to a final judgment against Fireline's claims. Thus, the court reversed the garnishment order, instructing its dissolution.